216.696.8700

Remedies for NLRA Violations Now Include Consequential Damages: What Employers Should Know

January 11, 2023
Labor and Employment

On Dec. 13, 2022, the National Labor Relations Board (NLRB) issued a monumental decision that significantly expands upon the remedies available to employees for violations of the National Labor Relations Act (NLRA). In Thryv, Inc., the Democratic majority of the NLRB ruled that the NLRB’s standard “make-whole” relief includes compensating employees for all “direct or foreseeable pecuniary harm” suffered as a result of unfair labor practices. While the NLRB’s decision will likely face legal challenges, employers should prepare for the major financial implications of this decision.

Make-Whole Relief

The NLRB provides “make-whole” remedies for employer violations of the NLRA. Traditionally, employees seeking relief for unfair labor practices, such as terminations based on unfair labor practices, have been limited to reinstatement and backpay. However, the NLRB’s decision in Thryv, Inc. significantly broadens the scope of “make-whole” relief to include all “direct or foreseeable pecuniary harm” suffered by an employee as a result of an employer’s unfair labor practice. In reaching this landmark decision, NLRB Chairman Lauren McFerran noted that:

“[e]mployees are not made whole until they are fully compensated for financial harms that they suffered as a result of unlawful conduct.”

Direct or Foreseeable Pecuniary Harm

Following the Thryv, Inc. decision, employers may be liable for all “direct or foreseeable pecuniary harm” resulting from unfair labor practices. This includes an employee’s loss of earnings and benefits, as well as indirect costs such as out-of-pocket medical expenses, credit card debt, late mortgage or rent payments, and any other costs that the employer knew, or should have known, would likely result from its unfair labor practice. While the new remedy does not cover emotional harm or pain and suffering, the NLRB noted that it is open to further expanding the “make-whole” relief standard.

The exact amount of compensation awarded will be calculated at the compliance stage of NLRB proceedings. The burden is on the General Counsel to present evidence establishing the amount of pecuniary harm, the direct or foreseeable nature of the pecuniary harm, and that the pecuniary harm was caused by the employer’s unfair labor practice. The employer will have an opportunity to rebut the amount of pecuniary harm, the foreseeability of the pecuniary harm, and the causal relationship between the pecuniary harm and the unfair labor practice.

Application of Thryv, Inc.

The NLRB expressly declined to limit its decision to extraordinary or egregious cases. Accordingly, compensation will be available to employees in all cases in which the NLRB’s standard remedy is “make-whole” relief. The NLRB will also retroactively apply this new remedy to all cases currently pending.

The Dissent

The Republican minority of the NLRB focused on the foreseeability element of the new remedy, arguing that this standard is too broad and may complicate damage calculations. Specifically, the dissent provides that determining whether pecuniary harm is “foreseeable”, and a result of an unfair labor practice is highly speculative and could lead to lengthy compliance proceedings and disputes between parties. The dissent also maintains that the NLRB’s decision may be an unconstitutional expansion of agency authority.

KJK will closely monitor and report on any legal challenges to Thryv, Inc. For more information or to discuss further, please contact KJK’s Labor and Employment Chair Rob Gilmore (RSG@kjk.com; 216.736.7240) or attorney Hannah Kraus (HJK@kjk.com; 216.736.7243).

Copy link
Powered by Social Snap